A report from
the Office for National Statistics (ONS) revealed Wednesday that the UK’s
economy contracted less than initially estimated in the second quarter of 2020.
According to
the final estimate, the UK gross domestic product (GDP) fell at a 19.8 percent q-o-q
in the second quarter, slower than a 20.4 percent q-o-q drop reported in the
advance estimate. Still, this is the largest quarterly contraction ever and the
second consecutive quarterly drop in GDP.
Economists had
expected the decline rate to be unrevised at 20.4 percent q-o-q, following the
first quarter's decrease of 2.5 percent q-o-q (revised from -2.2 percent).
In y-o-y terms,
the UK’s GDP fell 21.5 percent in the second quarter, following a 1.7 percent decline
in the previous quarter.
Gross fixed
capital formation fell -21.6 percent q-o-q, also less than initially thought (-25.5
percent q-o-q). Business investment (-26.5 percent q-o-q) made the largest
contribution to the decline.
Meanwhile, declines
of household consumption (-23.6 percent q-o-q, the largest quarterly
contraction on record) and government consumption (-14.6 percent q-o-q) were downwardly
revised from the previous estimate.
Elsewhere, net
external demand contributed positively, as imports (-22.7 percent q-o-q) declined
more than exports (-11 percent q-o-q).
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